Japan Inflation January 2021


Japan: Core consumer prices continue to fall in January

February 19, 2021

Core consumer prices increased 0.49% over the previous month in January, following December's flat result. January's reading marked the sharpest increase in prices since April 2014.

Core consumer prices—which exclude fresh food—fell 0.6% year-on-year in January, a more modest drop compared to December’s 1.0% fall. Meanwhile, the trend pointed down slightly, with the annual average variation of core consumer prices coming in at minus 0.3% in January (December: -0.2%). Lastly, consumer prices for all items fell 0.6% on an annual basis in January, which was a milder drop than December's 1.2% decrease.

Regarding the outlook for inflation this year, Hiromichi Shirakawa and Takashi Shiono, economists at Credit Suisse, commented:

“While a downward trend on mobile communication tariff is likely to cap the rise in inflation rates, CPI is projected to turn positive around mid-2021, which will be followed by a rise to 0.6% yoy in 2H 2021.”

FocusEconomics panelists expect overall consumer prices to drop 0.1% in 2021, which is unchanged from last month’s estimate. In 2022, the panel sees prices rising 0.6%.


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Japan Inflation Chart

Japan Inflation January 2021 0

Note: Year-on-year and seasonally adjusted month-on-month variation of consumer price index in %.
Source: Statistics Bureau (SB) and FocusEconomics calculations.

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